Successful issue of ORLEN seven-year bonds
The recent offering of ORLEN bonds has attracted nearly three times as much interest as initially expected. This prompted us to increase the issue value: on Monday, investors will acquire debt securities with an aggregate value of PLN 1bn. Within months, the bonds may be introduced to trading on the Catalyst market of the Warsaw Stock Exchange.
PKN ORLEN has just completed book building for seven-year bonds offered in private placement to non-banking institutions. As a result, on Monday February 27th, the Company will issue bonds for a total amount of PLN 1bn, paying interest based on six-month WIBOR plus an attractive margin of 1.6%. The strong investor interest and structure of demand confirm that the Company is viewed with a great degree of confidence, as a solid and reliable business. The issue has been subscribed for by: open-end pension funds (61.8%), insurance firms (27.2%) and investment/asset management funds (11%). The issue structure is in line with our strategy to diversify sources of funding and refinance existing debt.
“We are carrying on with the bonds issue programme, as we are determined to diversify sources of funding. Having placed the seven-year bonds issue, we will hold financing with an even longer maturity horizon. Concurrently, we have attracted investors from outside the banking sector. Our initial estimates of considerable market depth were on the mark: we have recorded interest in bonds worth more than PLN 2bn, compared with the initially proposed PLN 750m, while the attractive margin confirms that ORLEN is perceived as an excellent investment case,” said Sławomir Jędrzejczyk, Vice-President of PKN ORLEN’s Management Board, CFO.
In terms of value, the ORLEN issue emulates the largest ever issue of corporate debt to be launched on the Polish market. Moreover, compared with other offerings of Polish corporate debt to non-banking investors, it has the longest maturity. The price we have obtained is extremely attractive – the seven-year bonds have been placed on much more favourable terms than any recent corporate issue with a shorter maturity, the eurozone market included, which confirms PKN ORLEN’s perception as a sound and solid business. In addition, it is worth noting that PLN-denominated corporate issues with maturities as long as seven years are fairly rare, which means that PKN ORLEN is setting a new standard for the Polish debt market.
The issue process began in mid-February with a round of roadshow meetings at which the Company’s current standing and development plans were communicated.
In placing the issue on the market, we have relied on the support of two banks – Pekao SA and ING Bank Śląski SA.
Within several months, PKN ORLEN intends to introduce the bonds to trading on the Catalyst market of the Warsaw Stock Exchange.
